Pat and Nicole Formed Here & There as a Limited

question 69

Multiple Choice

Pat and Nicole formed Here & There as a limited liability company.Unless the member owners elect to be treated otherwise,the Internal Revenue Service will tax the LLC as:

• A)An S corporation.
• B)A C corporation.
• C)A non-taxable entity.
• D)A joint venture.
• E)A partnership.

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Definitions:

Explicit Costs

Money paid out to different parties during the operation of a business, covering expenses like employee salaries, leasing costs, and material purchases.

Opportunity Costs

The value of the next best alternative forgone as a result of making a particular choice.

Production

The process of creating goods or services by combining various elements such as labor, technology, and raw materials.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources that it already owns without paying for them explicitly.